In February 1967, he started working with Dudley Herschbach on reactions of hydrogen atoms and diatomic alkali molecules and the construction of a universal crossed molecular beams apparatus. In 1974, he returned to Berkeley as professor of chemistry and principal investigator at the Lawrence Berkeley Laboratory, and became an American citizen the same year. Since January15, 1994, Lee has been the head of the Academia Sinica[?] in Taiwan and in order to take this office, he renounced his American citizenship. Lee is still currently a professor at UC Berkeley.

Lee Yuantze played an important role during the 2000 Taiwanese Presidental Election. In the last week of the election he announced his support for the candidacy of Chen Shui-bian who subsequentally won a narrow victory over James Soong. This crucial endorsement has caused a great deal of hostility to be directed at him, particularly by novelist Li Ao.

At the request of ROC politicians, Lee was the Republic of China's unofficial representative in the 2002 APEC leaders' summit in Mexico. Lee's participation in politics is verbally attacked by Li Ao, who criticized Lee for being a "hypocrite" (「充滿偽善」) claiming to be a scholar who pursues neutrality and truth and yet ignores the Black Gold activity that Li claims Chen Shui-bian engaged in as the mayor of Taipei.

The fact that Lee is both Taiwanese and American by education, acculturation, and citizenship also causes Li Ao to explicitly maintain that the Nobelist that the Taiwanese are proud of is in fact just an American, who switched allegiance by his own choice. (See Chinese American.) With Bernice Wu Chin-li (吳錦麗 Wú Jǐnlì), whom Lee has known since elementary school, he has 3 children: Ted (news broadcasting personnel), Sidney (doctor), and Charlotte (sociologist). The fact that the Lee family, all members of which are Taiwanese-American, has been used by Li Ao as further proofs of the overwhelming Americanness of Lee that overtakes his Taiwanese heritage.

Since the 2000 election, he has not taken an active role in politics.

Lee was one of the four Nobelists who established the Wu Chien-Shiung Foundation.

His English name is not in the Wade-Giles (Li³ Yüan³-che²) that was popular in Taiwan.